EC to ‘carefully assess’ Hungary’s Paks deal

History

The European Commission has launched an in-depth investigation to “carefully assess” Hungary’s deal to hire Russian nuclear energy company Rosatom to upgrade the country’s sole nuclear power plant, the EC said on its website today.

“The Commission will in particular assess whether a private investor would have financed the project on similar terms or whether Hungaryʼs investment constitutes state aid. If the project is found to involve state aid, the Commission will investigate whether as planned it would lead to distortions of competition in particular on the Hungarian energy market,” the statement on the EC’s website says.

“Given the size and importance of the Paks project, the Commission has to carefully assess whether Hungaryʼs investment is indeed on market terms or whether it involves state aid,” says Margrethe Vestager, Commissioner in charge of competition policy, according to Hungarian news agency MTI. “This requires a complex analysis. I think it is important that stakeholders can also submit their views,” she adds.

The statement by the EC says that “at this stage, the Commission has concerns that this investment may not be on market terms, as Hungary argues.” According to the EC’s statement, in order to be compatible with rules of the EC, an aid measure must “be proportionate to the objectives pursued and address a genuine market failure” and it must “be adequately remunerated”.

Prior to the official announcement by the EC on Thursday, reports suggested that until the infringement procedure is wound up, the expansion could be suspended. No such announcement has been made by any of the related parties.

Despite the ECʼs probe, Hungary does not need to renegotiate its intergovernmental agreement with Russia on the expansion of Hungary’s sole nuclear plant in Paks, Hungary’s Foreign Minister Péter Szijjártó said on Saturday.

On Friday morning in his regular fortnightly interview with state-owned Kossuth radio, Hungary’s Prime Minister Viktor Orbán said that despite an EC investigation into the no-bid contract for the project, the Hungarian government is committed to having Rosatom implement the upgrade of Hungary’s sole nuclear power plant in Paks.

Rosatom said on Friday it is following the debate on Hungaryʼs planned upgrade of its sole nuclear power plant in Paks, Rosatom told Hungarian news agency MTI after the European Commission announced it had initiated an infringement procedure on the expansion.

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